Jana Small Finance Bank (SFB) filed a drafted red herring prospectus (DRHP) on Thursday for a new issue of Rs 700 crore in securities, followed by a sale of shares by current shareholders.
Alpha TC Holdings, ICICI Prudential Life Insurance Company, Bajaj Allianz General Insurance Company, and Vallabh Bhansali are among the investors looking to sell shares via the offer for sale (OFS) program. “We intend to apply the Net Proceeds to augment our Bank’s Tier –I capital base to meet our Bank’s potential capital requirements, which are foreseen to arise from growth in our Bank’s assets, fundamentally our Bank’s advances and investment portfolio, and to ensure docility with relevant RBI regulations and guidelines,” the SFB stated in the DRHP.
Jana SFB’s deposits increased at a 129.9 percent annual rate and endured at Rs 9,650 crore on March 31, 2020, up from Rs 4,200 crore the preceding year. It reported having seen the highest rate of disbursement growth and assets under management (AUM) growth among SFBs in FY20. “The Jana SFB asset portfolio recommenced to diversify, with 25.0 percent of the book secured in FY20, compared to 15.0 percent in FY19,” the bank said. Its gross secured advances increased from Rs 1,000 crore in FY19 to Rs 2,860 crore in FY20.
In FY20, its capital sufficiency ratio was 19.3 percent, with the tier-I ratio at 13.1 percent.
The bank’s net interest margin (NIM) was 9.36 percent at the end of September 2020, down from 9.81 percent on March 31, 2020. Jana SFB’s total non-performing assets (NPAs) were 2.72 percent as of September 30, 2020, down from 42.21 percent as of March 31, 2018.
The bank connected the decrease in bad loans to increased secured advances to depreciate the risk of loan defaults and growth in agricultural and allied loans advances within unsecured advances.
As of September 30, 2020, the Reserve Bank of India’s (RBI) MSME scheme had restructured Rs 44.37 crore, or 0.43 percent, of a total of Rs 10,419 crore of gross advances outstanding. Real write-offs were Rs 12.34 crore for the six months ended September 30, 2020, and Rs 49.85 crore for the fiscal year ended March 31, 2020.